Germany’s ban on arms exports to Saudi Arabia has emerged as a major challenge to European defence value chains across Europe, which include the UK, France, and Italy.
Meanwhile, the United States faces its own security policy dilemma vis-à-vis, Saudi Arabia, as Washington wants to secure civilian-use nuclear plant development contracts while, at the same time, containing Kingdom’s aspirations for the development of a nuclear bomb.
Germany’s ban is, however, disrupting aspirations for the consolidation of the European defence industry. A prime example of this is Saudi Arabia’s fleet of 72 Eurofighter Typhoons, which is a project developed by a consortium that also includes the UK’s BAE Systems.
The Royal Saudi Air Force is now experiencing a disruption in the service and supply of spare parts, which undermines their contract to deliver another 48 jet fighters, which is worth just under €6 billion.
The German export ban also undermines the delivery of the long-range air-to-air ‘Meteor’ missiles, which are assembled by MBDA, a joint venture between Airbus, BAE Systems, and Italy’s Leonardo.
During the Munich Security Conference, German Chancellor Angela Merkel acknowledged that Berlin’s approach to arms exports undermines the consolidation of Europe’s defence industry. As a result, Germany and France are in talks over a new defence export agreement.
Meanwhile, the US’ Deputy Energy Secretary Dan Brouillette said the US will not allow Saudi Arabia to develop a nuclear bomb.
The US industry is keen to secure Saudi civilian nuclear power contracts. A Saudi nuclear programme could be worth more than $80 billion, depending on how many energy plants Saudi Arabia will build.
However, under the United States Atomic Energy Act of 1954, cooperation on nuclear energy should not allow for the development of a nuclear arsenal, including plutonium enrichment.
On the sidelines of the Munich Security Conference, Gamble said that nuclear was part of the conversation for the development of emissions-free energy but the technology’s dual-use entails considerable risks.
Saudi Arabia has refused to rule out uranium enrichment, pointing to Iran’s ability under the 2015 nuclear agreement. If Saudi were to develop nuclear fuel, some of it could be diverted for a covert weapons project, which was always the risk with Iran’s nuclear programme.
Under the 2015 agreement, Iran maintains a small number of nuclear centrifuges though it has to ship 97% of its fuel out of the country. Buying ready-made nuclear fuel abroad would be cheaper, but Riyadh is keen to match Iran’s nuclear capability. Asked in Congress in March 2018, Energy Secretary Rick Perry dodged a question about whether the Trump administration would insist that the kingdom cannot produce nuclear fuel.
Saudi Arabia has its own plutonium deposits and nuclear technology research centres.
The US House and Senate could veto any nuclear agreement with Saudi Arabia, although they would need an extended majority that can override the President’s veto power.
The Saudi energy ministry has made clear that the kingdom’s programme would be strictly civilian in scope and aims to diversify energy sources.